Medford's first food co-op is folding before it ever opened its doors, and the board of directors has set a meeting for Monday to vote on dissolving the organization.

Medford's first food co-op is folding before it ever opened its doors, and the board of directors has set a meeting for Monday to vote on dissolving the organization.

The co-op is terminating its lease in the former Hubbard's Hardware building on the corner of Riverside Avenue and Main Street.

"They've exhausted all of their options, and they determined that it wasn't viable to do," said Bob Seus, who with his siblings owns the building.

"We did everything we could," he said.

The organization sent out mailers to its members this week inviting them to attend Monday's meeting.

"We have explored everything," said Velda Welch, president of the co-op's board of directors. "We have gone to every financial institution. We have explored angel investors."

She said there's no salvation in sight and the organization can't make its lease payment.

"It's been pretty depressing," she said.

Not all the members are ready to throw in the towel, however. John Statler, a Medford City councilman, said he's remaining optimistic.

"There are a group of owners seeking alternatives," he said, adding that he's among about a dozen members actively looking for a way to keep the idea alive, though they have no firm plans.

Welch said there are about 1,500 members, which she said is a lot of community support for a start-up food co-op. She said after the dissolution, if anyone wants to take the ball and run with the idea, they can.

After 21/2 years of effort, the organization learned in August that its major lender, National Cooperative Bank, tabled the loan. NCB recently added a requirement that the organization qualify for loans at a Medford bank. Oregon banks generally do not lend to start-up businesses without a Small Business Administration government loan guarantee, and such guarantees are not given to start-up co-ops.

The Medford Market in September began last-ditch efforts to gather the $1.5 million it needed to open its doors, but the effort proved fruitless.

Organizers for the would-be co-op have been leasing the Hubbard's building space since November. Seus said he is looking for interested parties to lease the building and has no tenants lined up at this time.

Following dissolution, members' $100 subscriptions will not be returned, a risk subscribers were warned about. The membership money was spent on lease payments, contractor fees and attorney fees. Welch said everyone who gave a loan will get the funds back.

The members-only meeting is scheduled for 7 p.m. Monday in the cafeteria at South Medford High School, 815 S. Oakdale Ave., Medford.

Reach reporter Meg Landers at 776-4481 or e-mail mlanders@mailtribune.com.